
[Federal Register: November 19, 2007 (Volume 72, Number 222)]
[Notices]               
[Page 65112-65113]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19no07-107]                         

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SECURITIES AND EXCHANGE COMMISSION

 
Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: U.S. Securities and 
Exchange Commission, Office of Investor Education and Advocacy, 
Washington, DC 20549-0213.

Extension:
    Rule 8c-1, SEC File No. 270-455 , OMB Control No. 3235-0514.

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange 
Commission has submitted to the Office of Management and Budget 
requests for approval of the following rule: Rule 8c-1.
    Rule 8c-1 (17 CFR 240.8c-1) under the Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.) generally prohibits a broker-dealer from 
using its customers' securities as collateral to finance its own 
trading, speculating, or underwriting transactions. More specifically, 
the rule states three main principles: first, that a broker-dealer is 
prohibited from commingling the securities of different customers as 
collateral for a loan without the consent of each customer; second, 
that a broker-dealer cannot commingle customers' securities with its 
own securities under the same pledge; and third, that a broker-dealer 
can only pledge its customers' securities to the extent that customers 
are in debt to the broker-dealer.\1\ Pursuant to Rule 8c-1, respondents 
must collect information necessary to prevent the hypothecation of 
customer accounts in contravention of the rule, issue and retain copies 
of notices to the pledgee of hypothecation of customer accounts in 
accordance with the rule, and collect written consents from customers 
in accordance with the rule. The information is necessary to ensure 
compliance with the rule, and to advise customers of the rule's 
protections.
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    \1\ See Securities Exchange Act Release No. 2690 (November 15, 
1940); Securities Exchange Act Release No. 9428 (December 29, 1971).
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    There are approximately 142 respondents per year (i.e., broker-
dealers that conducted business with the public, filed Part II of the 
FOCUS Report, did not claim an exemption from the Reserve Formula 
computation and reported that they had a bank loan during at least one 
quarter of the current year) that require an aggregate total of 3,195 
hours to comply with the rule. Each of these approximately 142 
registered broker-dealers makes an estimated 45 annual responses, for 
an aggregate total of 6,390 responses per year. Each response takes 
approximately 0.5 hours to complete. Thus, the total compliance burden 
per year is 3,195 burden hours. The approximate cost per hour is $56, 
resulting in a total cost of compliance for the respondents of 
approximately $178,920 (3,195 hours @ $56 per hour).
    The retention period for the recordkeeping requirement under Rule 
8c-1 is three years. The recordkeeping requirement under this rule is 
mandatory to ensure that broker-dealers

[[Page 65113]]

do not commingle their securities or use them to finance the broker-
dealers' proprietary business. This rule does not involve the 
collection of confidential information. Persons should be aware that an 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless it displays a current 
valid control number.
    Comments should be directed to (i) Desk Officer for the Securities 
and Exchange Commission, Office of Information and Regulatory Affairs, 
Office of Management and Budget, Room 10102, New Executive Office 
Building, Washington, DC 20503 or by sending an e-mail to: Alexander--
T.--Hunt@omb.eop.gov; and (ii) R. Corey Booth, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Shirley 
Martinson, 6432 General Green Way, Alexandria, VA 22312 or send an e-
mail to: PRA--Mailbox@sec.gov. Comments must be submitted within 30 
days of this notice.

    Dated: November 7, 2007.
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-22511 Filed 11-16-07; 8:45 am]

BILLING CODE 8011-01-P
